Part 3: Economic Structure | Generative AI, Copyright Law, and Market for Digital Presence.

In this series of articles, we are discussing the economic opportunity that digital replication or deepfake can bring. We introduced the topic in the first article and discussed the legal structure in the second.?

In this article, we will try to discuss the possible economic structure of a market for digital presence.

What do I mean by a ‘Market for Digital Presence’?

We've discussed the general concepts and legality of monetizing digital presence. But what would a market for “digital presence” actually look like?

Any market functions by matching buyers and sellers, primarily through pricing. A market for digital presence would provide businesses (or individuals) with a legal way to obtain rights to create digital replicas - essentially deepfakes - of individuals.

Who are the sellers?

In theory, any individual (or even virtual character) could be a seller. However, realistically, this market is driven by face value. To succeed, sellers would need some level of face recognition or influence.

Who are the buyers?

Predominantly, media businesses - film studios, ad agencies, and production houses - would be the primary buyers. However, game developers and independent content creators could also participate.

Now, since buyers and sellers are matched based on price, what factors would influence pricing?

Primary Pricing Drivers

Who?

The first pricing factor is “who” the person is. As mentioned earlier, this market primarily revolves around face value, meaning celebrities would command higher prices than non-celebrities. Beyond celebrity status, suitability matters - how well the individual’s brand aligns with the buyer’s needs.

What?

Digital presence comes in different forms. It could be just the face, the full body, only the voice, or even the person’s unique style and mannerisms - useful for creating lifelike video game characters.

How?

The purpose of digital replication also plays a key role in pricing. Celebrities, for instance, would likely charge more for their digital presence in movies compared to advertisements. Additionally, the specifics of a project - such as exclusivity or the intended audience-could further impact costs.

For how long?

The contract duration for licensing digital presence is another major pricing factor. Longer-term agreements are naturally more expensive, as they restrict the seller’s ability to license their likeness elsewhere.

For a market to function, both buyers and sellers need to benefit. So, what advantages would they gain from participating in such a market?

Economic Benefit for the Rights Buyers

The biggest advantage for buyers acquiring digital presence rights is convenience. Commercial media projects heavily rely on the face value of actors, but securing high-demand celebrities can be difficult for production houses. Digital replication solves this issue potentially at a lower cost since celebrities may not need to dedicate much time to the project.

Casting actors for smaller roles also becomes significantly easier.

Filmmaking is a complex process, and certain scenes-especially action sequences are difficult to shoot. Using high-profile celebrities for such scenes also involves substantial insurance liabilities. Digital replication eliminates these costs and logistical challenges.

Additionally, large-scale productions often require travel, which can be cumbersome and expensive when moving the entire cast and crew. Digital replication can reduce these expenses, making location-based shoots more manageable.

In the first article of this series, we discussed Heart on My Sleeve, a song featuring the AI-generated voices of Drake and The Weeknd. This same technology could revolutionize dubbing - whether for animated films or translations into other languages. Instead of voice actors recording full scripts, projects could be completed with just a few samples, significantly lowering production costs.

Benefits to the rights sellers

The biggest advantage for sellers of digital replication rights is expanded monetization opportunities. Traditionally, performers can only take on a limited number of projects due to time constraints. With digital replication, they can participate in unlimited projects without being physically present or with only minimal involvement.

Additionally, performers can continue working even if they are sick or unable to appear in person for other reasons. Aging actors can maintain their on-screen presence for years, extending their careers and revenue streams.

Another key benefit is that a formal market for digital replication rights could help combat unauthorized digital replication. We saw a similar trend when media streaming services reduced the appeal of pirated content shared via torrents. A structured marketplace would allow performers to control how their digital presence is used and choose the projects they want to be associated with.

Moreover, many celebrities-such as sports stars-aren’t trained actors. Digital replication could enable them to appear in ads or other media projects without needing acting experience.

Let us end this article here.